Win on Service in a Tough Economy

Great service is always a differentiator, even more so when people are hurting. The service companies that thrived coming out of the Great Depression — think Macy’s and Disney — figured out how to take care of their customers in a climate of fear and uncertainty. The fog of recession may be starting to lift, but most households and businesses are still feeling vulnerable today. History makes a compelling case that serving customers with integrity — delivering steadfast, predictable service quality — can translate into outsized loyalty and market share when the economy commits to a comeback.

But service costs money, and there’s still less of that going around. Adding more frontline people, for example, adds weight to your cost structure that customers can’t easily absorb right now. In other words, your market’s unlikely to pay you extra to cover your investment in customer caretaking. So how else could you fund it? Below are five strategies to free up the resources you need to compete on excellence and empathy:

Underperform. It turns out winning service companies aren’t great at everything. They’re bad at some things, often very bad, but the pattern isn’t random. It’s tightly mapped to the priorities of their customers. Service leaders tend to over-deliver on the features their customers value most and under-deliver on the features their customers value least. Walmart offers rock-bottom prices and fantastic product variety, but asks its customers to give up convenient locations and Zen-like ambience. Walmart’s lighting is unforgiving, but you won’t find a better bang for your retail buck. What would your customers be willing to give up? What would you have to give them in return?

Streamline the back office. One way Zappos funds its legendary service is by relying on a very lean operation. Back-end cost savings get invested in front-end excellence, which means that shipping’s free and a kind, competent Zappos employee has the cultural freedom to stay on the phone with you as long as you want. Customer call length has even become a badge of honor at the company’s 24-hour call center — last we checked, the record was eight hours on the phone with a new widow whose husband had been in charge of buying the children’s shoes.

Simplify the front office. The more complex the service task, the harder it is to focus on customer needs. Let’s go back to that call center. A typical call center employee (who doesn’t work at Zappos) is asked to manage up to eight different screens at once, while being timed on how quickly he or she can hang up the phone. This makes it difficult to respond to the demands and anxieties of the human being on the other end of the line. Simplify your employees’ jobs, and your service levels will improve. Figure out how to go from eight screens to four screens, and put away the timer.

Defy the cost/service tradeoff. The ultimate goal is to lower costs in ways that also improve service. Consider a classroom. A class is more cost-efficient than private tutoring, but it also improves the experience by letting students exchange ideas and learn from each other. Group therapy works the same way. Can you reduce any of your costs in ways that would also benefit your customers? One place to start looking is at the time involved in a customer-facing process. Speeding things up usually saves you money, while making customers happier. Everybody wins.

Put your customers to work. Self-service is on the rise in almost every service industry we’ve studied. The reason is clear — asking customers to pump their own gas, bus their own tables, or perform any other task your employees once did can indeed save you money. But the trick, once again, is to design self-service in a way that actually improves the experience. Use airline check-in kiosks for inspiration. Airlines’ most demanding customers actually prefer to check in and choose their own seats on efficient touch screens than to deal with an airline employee, however cheerful, at 6:30 in the morning.

We’ve seen these five strategies work in a wide range of service industries, from insurance to travel to high-end retail. What are cost-effective approaches to service that you’ve seen or used?